Grid Parity

Reaching grid parity is one of the objectives of solar power. Grid parity is when you’re able to generate electricity at same or a lower price than what you buy from the grid. In other words, your price per kWh is the same or less than the price the electricity company can deliver to your house. This is the point where subsidies or other kind of governmental support isn’t needed.

These years grid parity is reached for solar power. We are now at a significant milestone. It has become affordable by a straight forward investment.

There are several factors involved in evaluating if grid parity has been reached. Basically there are two sides to consider: Price of the electricity produced. And the price from the electricity company.

The price of the electricity produced comprises of the project cost: materials (panels, inverter, cables, fuses, brackets etc.) and the installation.

But we can’t produce power if there’s no sun or if it’s limited. Luckily, the sun in itself is a very stable energy generator.

And the lifetime of the system is equally important in this calculation. The longer your system lasts, the cheaper your price per kWh. A system which lasts 20-30 years is much less than half the cost of a system which only last 10 years. How much each year in the lifetime is lowering the cost is something we’ll also come back to later on. For now, just note that quality IS important.